Chile's Metrogas denies overcharging allegations

Chilean natural gas distributor Metrogas denied claims that it overcharged its clients by 20-25% in 2013.

The allegations stem from an article published by local daily La Tercera, citing sources with knowledge of a study commissioned by the national energy commission (CNE).

According to the sources, the company's profits last year exceeded the 11% margin allowed by law by around 5pp, meaning that its 548,000 clients in the Santiago Metropolitan region should have paid less.

"In its 20-year history, Metrogas has never charged its clients more than what the law and the competition permit," the company said in a statement. "Our rates are fixed by the energy market and we're subject to the prevailing regulations."

If Chile's gas distributors exceed the 11% profitability limit, they must report it to antitrust watchdog TDLC so that the regulator can determine whether competitive conditions exist and set consumer prices accordingly.

Local reports quoted Metrogas arguing that more expensive competition exists in the form of liquefied petroleum gas (LPG) and electricity.

Energy minister Máximo Pacheco was quoted by local media saying that Chile's natural gas distribution regulations are "minimal and incomplete," and that the ministry is working on overhauling them to promote competition and protect consumers.

In May, Pacheco announced that the ministry would introduce the new rules to congress in H2.

Pacheco confirmed that the CNE study will be complete by mid-October.

Although CNE is in charge of monitoring the profitability of distributors, the last study of this kind that it published was for 2010-11. In that study, the company's profit margin was already near the limit at 10.4%.

La Tercera sources said that the government of then-president Sebastián Piñeira began a study in 2012, that for unknown reasons was never finished.